Tocor Is Considering the Implementation of a Lockbox Collection System

question 33

Multiple Choice

Tocor is considering the implementation of a lockbox collection system for its mid-western and western sales regions.Sales in those two regions are 30 percent of Tocor's annual sales of $560 million.The lockbox system will cost $187,000 a year and reduce collection time by 3 days.If Tocor could invest any released funds at 10.85 percent, should it use the lockbox system? Assume 365 days per year.

• A)Yes, savings of $149,819
• B)Yes, savings of $312,397
• C)No, loss of $37,181
• D)No, loss of $35,100

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Definitions:

Medical Abbreviation

Shortened forms of words or phrases used in the medical field for ease of communication.

Cerebrovascular Accident

Cerebrovascular Accident, commonly known as a stroke, occurs when the blood supply to part of the brain is interrupted or reduced, causing brain cells to die.

Medical Abbreviation

Shortened forms of words or phrases used in the medical field to streamline communication.

Cancer

Cancer refers to a collection of illnesses marked by the unchecked proliferation and dissemination of atypical cells within the body, which can result in death if left untreated.